Long dominant in the AI chip field in datacenter, referred to as 'the world's most important stock' by Goldman Sachs. $NVIDIA (NVDA.US)$ It became a target of deep selling in the market in the second half of this year, but European asset management giant Impax Asset Management quietly seized a significant opportunity to 'buy on dips' and establish a long-regretted position in Nvidia shares.

The London-based asset management company manages a total of $50 billion. Its CEO and founder Ian Simm stated that he and his investment team have long been seeking to correct a major mistake they realized – that the institution missed out on NVIDIA's shocking 800% epic surge since early 2023, failing to reap up to an 800% return from the soaring value of NVIDIA stock.

"We have indeed underestimated the immense market potential of their hardware products," Simm recently said in a media interview. Impax has long been exploring ways to follow this unprecedented wave of AI investment not obtained from owning NVIDIA 'expensive' until it was sold, providing us with the opportunity to enter this field.

Since the second half of this year, NVIDIA's stock price has once entered a sharp decline, causing its market cap to plunge from its peak to near the bottom, a nearly $1 trillion contraction. However, the sharp pullback in NVIDIA's stock price provides Impax, who missed the epic surge of NVIDIA, with an excellent opportunity to buy on dips. Although most of the sharp decline in NVIDIA's stock price has been recovered, Simm believes that the current market cap of over $3.2 trillion for the tech giant is still severely underrated, stating that its actual value is much more than this figure.

NVIDIA's stock price once sat firmly on the throne of 'the world's highest market value listed company' this year, but in the second half of this year, it fell into a downturn due to the uncertain prospects of AI monetization and global macro policy turmoil, causing the stock price to once plunge sharply.

Founded in 1998, Impax is best known for its institutional investor identity in the green transition. Among many asset management companies focusing on a more sustainable economic transition, it has become a rising star in the asset management industry. Different from the trading trends pursued by the vast majority of Wall Street asset management institutions, Impax has long focused on green transition investments. But with the global wave of AI investments, the conservative European asset management giant is also turning to chase this trend for stronger asset management returns.

In recent years, rising interest rates, the Russia-Ukraine conflict, worsening geopolitical situations in the Middle East, and the rise of the so-called Magnificent Seven tech giants on the US stock market have made green investments almost a complete failure. As stocks related to renewable energy performed persistently poorly, Impax Asset Management's own stock price has fallen nearly 30% on the European stock market this year, while the S&P Global Clean Energy Index has dropped by over 10%. At the same time, the US benchmark - the S&P 500 index has risen by over 20% during the same period, continuing the bull market trend since 2023 driven by the AI frenzy.

This asset management giant with a size of up to $50 billion is strategically positioning itself to buy Nvidia with real gold and silver on dips.

Earlier this week, Impax's performance report revealed that for the fiscal year ending September 30, the stock gains held by the asset management giant were approximately £5.3 billion (approximately $6.9 billion). However, this is still below the net outflow of £5.8 billion suffered by Impax during the same period.

Him expressed in an interview that Impax is learning from the lessons of the past few years and focusing more on undervalued market opportunities to generate greater returns, particularly with large tech companies like Nvidia and Microsoft.

"Frankly speaking, our main investment strategy has underperformed in recent years because we tend to achieve growth at reasonable prices, steering clear of the trend and speculation surrounding large US tech investments." He stated.

According to data compiled by institutions, during a significant Nvidia stock drop in June, Impax indeed bought Nvidia stocks with real gold and silver on the dip, attempting to seize the global AI investment frenzy. Data shows that Impax's stake in the chip giant more than doubled as the number of shares increased from a mere 1.4 million shares at the end of the first quarter to 4.9 million shares by the end of June. This data has been officially confirmed by Impax.

Him has repeatedly indicated in recent media interviews that with the expected boom in artificial intelligence driving market fervor for its AI GPUs, Impax still believes Nvidia's value is severely undervalued.

Him mentioned that holding Nvidia stocks is also reasonable from a climate and green transformation perspective because like other tech giants, Nvidia's core hardware products will also require a large amount of renewable energy to fuel its growth. He stated that with the increasing demand for renewable energy, tech companies developing more efficient chips and large AI models like Nvidia will be more favorable towards global environmental trends and green transformation.

Nvidia announced in an important event earlier this month that this chip giant will begin bulk deliveries of its new AI GPUs based on the Blackwell architecture to major clients like Amazon and Microsoft in the fourth quarter of this year. They have optimized the development of OpenAI's GPT-4 AI large model to only need 3 gigawatts of power, a significant improvement from the 5500 gigawatts needed a decade ago. "Nvidia's energy-saving capability makes its stock more valuable," Him said.

Impax holds shares of NVIDIA in five classic strategies and various funds, including its 'Global Opportunities Portfolio', which is limited to 40 stocks composed of companies with diversified business models, operating in high-growth markets and 'not overly favored by the market for any reason'. Microsoft (MSFT.US) belonging to the 'Magnificent Seven' camp is also included because Impax believes that Microsoft's actual value is underestimated amid the long-term trend of continuous development in artificial intelligence technology.

Relying on its status as a major shareholder of OpenAI, Microsoft has embedded flagship AI models like GPT-4, which OpenAI is proud of, into its flagship applications such as the Office suite and the Microsoft Azure cloud platform. This move has positioned Microsoft as the absolute leader in AI application end globally. Since 2023, its performance and stock price have continuously increased, once holding the title of the 'world's highest market-cap listed company'. However, Impax believes that Microsoft's current market cap of about 3.1 trillion USD is still undervalued.

In fact, the entire global 'industrial space' now seems undervalued, according to Impax. He mentioned that with the increasing likelihood of a 'soft landing' for the US economy, this situation may change, helping to restore global investor confidence. 'Capital costs are rapidly decreasing, consumer sentiment is stabilizing, so stock investments look more attractive,' said Impax.

A series of significant positive news recently has quietly propelled NVIDIA's stock price to approach historical highs.

At an event in early October, NVIDIA CEO Huang Renxun stated that the demand for products based on the Blackwell architecture in the market is 'very crazy'. Recently, many global technology companies could not bypass NVIDIA's cutting-edge AI GPU servers in showcasing their business progress. Combined with Citigroup's optimistic forecast for data center spending, this has driven NVIDIA's stock price to approach historical highs this week.

Amidst the high volatility in the global stock market, NVIDIA, the dominant force in AI GPU in the field of AI infrastructure, has quietly risen to near historical highs. Before the drop in NVIDIA's stock price on Thursday, NVIDIA had been on a strong uptrend for five consecutive trading days. On Tuesday, it briefly surged to $133.48 during regular trading hours, with a cumulative 14% increase in 5 days, getting closer to the historical high of $140.747.

**** electronics giant Foxconn from China revealed during its annual Technology Day held on Tuesday that it is constructing a large-scale artificial intelligence server manufacturing infrastructure in Mexico to meet the booming demand worldwide for Nvidia's latest GB200 AI GPU hardware system.

Hon Hai Chairman Liu Yangwei said at the conference that, as NVIDIA CEO Huang Renxun said, the market demand for the most advanced AI servers - equipped with the Blackwell architecture AI GPU AI servers is extremely high, and the company's Mexico factory's capacity will be huge. The company is also using NVIDIA's Omniverse digital twin application software to build a highly automated large manufacturing facility in Mexico, using AI to create a factory that produces AI servers.

Microsoft's Azure cloud computing service platform almost simultaneously boasted that the tech giant has obtained an Nvidia AI server system equipped with the GB200 GPU. Azure's official cloud platform even emphasized that it is the first large tech company among global cloud computing service providers to successfully deploy a large AI GPU server system with the Blackwell architecture.

According to Citigroup's latest forecast data, by 2025, the capital expenditures related to data centers of the four largest tech giants in the USA are expected to increase by at least 40% year-over-year, with these massive capital expenditures largely tied to generative AI, indicating that there is still a huge demand for computing power for applications like ChatGPT. Citigroup stated that this implies that the spending scale on data centers by the giants is likely to continue to expand significantly beyond the already strong 2024 expenditure scale, and the institution expects this trend to provide very significant positive catalysts for the stock prices of data center AI GPU leader Nvidia and data center interconnection (DCI) technology providers. Recently, Nvidia, which has seen a "five consecutive rise" in its stock price, is gathering momentum to make a new high.

In a research report, Citigroup refers to the four major tech giants as the global cloud computing giants Amazon, Google, and Microsoft, along with social media Facebook and Meta Platforms, the parent company of Instagram. In this latest research report released by Citigroup, it is projected that the data center capital expenditures of these four major tech giants will increase by 40% to 50% year-over-year by 2025. Citigroup and other major Wall Street institutions remain bullish on Nvidia, generally betting that Nvidia's stock price is likely to surpass the $150 mark in the next 12 months.

The current demand for AI chips is indeed strong, and it may remain so for a long time to come. TSMC's management recently stated at an earnings conference that the CoWoS S/L/R advanced packaging capacity required for AI chips is expected to continue to be in a situation of high demand-supply imbalance until 2025, with a possibility of slight easing in 2026. In addition, the latest quarterly sales revenue announced by TSMC, the core chip manufacturer for Nvidia and Apple, was 759.7 billion New Taiwan Dollars (approximately 23.6 billion US dollars) for the quarter ending in September, exceeding the analysts' average expectation of 748 billion New Taiwan Dollars. This also means that TSMC's overall sales revenue in the third quarter increased by 36.5% year-on-year, clearly exceeding TSMC's forecast range in July, showing that the demand for the most core infrastructure required for artificial intelligence – chips – remains very strong.

Editor/rice